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South Florida

Condo market redux

South Florida’s preconstruction condo market is adjusting after a challenging year for developers and brokers. While the slowdown is sticking around, especially in Miami, agents and sellers have shifted their pricing and strategies to close deals.

Generally speaking, condos spent more time on the market and sold for reduced prices last year, according to a fourth-quarter Douglas Elliman report. Sellers also had to temper their expectations more than in the past: In the Miami Beach luxury condo market, the difference between asking and closing prices grew to 12.7 percent during the fourth quarter of 2016, up from 7.2 percent the year prior. At Faena House, for example, a unit traded for $12.5 million in January, a steep discount from its $16.5 million asking price.

But the bright spot may be Boca Raton. In Boca, luxury condos spent less time on the market and sold for less of a discount year over year in the fourth quarter. Listing inventory also fell by nearly 30 percent.

According to a report from Integra Realty Resources and One Sotheby’s International Realty, South Florida inventory in the $5 million to $10 million range is up nearly 25 percent, with pricing down 3.5 percent. The price point most vulnerable, though, is between $1 million and $5 million, where inventory has increased nearly 36 percent, according to the report.

The expectation — and what’s already been seen to date — is that 2017 will be a buyer’s market. A surplus of inventory will bring pricing down. That, coupled with the prospect of rising interest rates, may lure more buyers in, but likely at a lower price point as the market continues to adjust.

Despite the glut of product already in the pipeline in Miami and Miami Beach, developers are still launching sales for projects, including Monad Terrace, the Arbor and Aston Martin Residences in Miami-Dade. Following is a list of condo projects in the South Florida pipeline. 

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